Assessing Pension expenditure determinants : the case of Portugal

• Autor(a) principal: Garcia, Maria Teresa
• Data de Publicação: 2019
• Outros Autores: Silva, André Fernando Rodrigues Rocha da
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/17358
• topic: pension expenditure; determinants; linear regression analysis

Pension expenditure is a concern for the sustainability of public finances in the European Union. Therefore, assessing pension expenditure determinants is crucial. This study aims to disentangle the impact of demographic and economic variables, such as ageing, productivity, and unemployment, on pension expenditure. Using Portuguese time-series data, from 1975 to 2014, statistical evidence was found of co-integration between unemployed people aged between 15 and 64 years old, apparent productivity of labour, the old-age dependence index and pension expenditure as a share of gross domestic product. The use of a vector error correction model, with impulse-response functions and variance decomposition, showed that ageing has an almost insignificant impact in the long-run, when compared with unemployment and productivity.